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How To Make Money From A Holiday Rental

8:21 AM

If you’re going to make money, wouldn’t it be better to be doing something that also makes people happy, rather than something that just makes you happy? While, admittedly, there aren’t too many jobs in the world that do this, anything connected to travelling most definitely is. And with the bloom of people interested in private vacation rentals, it’s never been a better time to get involved in the industry. But how do you transition from the ‘wouldn’t that be a good idea’ stage to the ‘and now we’re making money’ stage? We take a look at some useful advice below.

Dash Your Illusions

First thing’s first: you need to curb your enthusiasm. While it’s easy to look at some simple maths and see all the potential to make heaps of cash by renting out to other people, this is rarely what happens. The days of ranking in mountains of cash are no more: there’s just too much competition and the standards are too high for that to be the case. However, if you do things in a smart way, then you’ll find that you’re able to build a handsome side income, and possible a full-time wage. But it’s important to understand that it does require work, and will take some time to build things up to a profitable level.

See What’s Legal

And before you get too deep into the planning stages, you’ll want to check that you’re legally able to do what you have planned. In light of the burst of activity in the private renters marker, many cities have begun to clamp down on vacation rentals. If you don’t comply with the law, you’ll find that your listing has been taken off, or, worse, that you face a severe fine. As with any other money-making venture, it’s best to check that you’re fully compliant with the law, if only because it makes everything much more straightforward.

In the Right Area

Now that you’ve got a realistic idea of what’s involved, it’ll be time to begin planning how you’re actually going to make money from your home. People usually do it in two ways. They either rent out a section of their home, or they buy a new property, and rent out the entire house or flat. There’s nothing wrong with the former, but the latter is better -- it’s through this method that you’re able to make the most money. If you are going to buy a new place with the intention of renting it out to travellers, then you’ll want to ensure that it’s located in an area that people would want to visit. It doesn’t matter exactly what the draw is -- be it nature, city, landmark, or whatever -- so long as there is something that makes the area stand out.

Who’s the Target?

Before you can get too deep into the planning process for your holiday home, you’ll want to think about which type of people will want to rent your property. You’re not designing a space that’s for you to use (though of course you’ll be using it some times), but for other people. While you might find it difficult to think about what other people want, different demographics do generally place themselves into categories relatively simply (we say relatively). For example, the people who would visit a home out in nature would prefer a more comfortable and rustic style than someone who wants to stay in a hip part of a modern city -- they’ll likely prefer style. Once you’ve figured out who it is that you’re targeting, you’ll be able to figure out how you’re going to design the space.

Invest in the Best

Once you’ve figured out the overall theme for the property, you’ll want to get to work on fitting it out with everything it needs to be a relaxing, comfortable, well-appointed space. It’s at this point where many people take a wrong turn. The location and overall condition of the home is important, but what’ll take your listing from ‘good’ to ‘great’ will be the quality of the decor. If you invest in the best tables, chairs, lighting, and so on, then you’ll be greatly increasing your chances of positive feedback and success. Plus, the better the quality of the items you have in your property, the more you’ll be able to charge -- so paying that little bit extra in the early stages will pay itself back over and over again.

Listen to Feedback

And talking of positive feedback: this is one of those aspects of running a holiday home that’s the most important after you’ve got everything up and running. Feedback is going to tell you where you’ve gone wrong, what you’ve got right, how you could improve: everything, basically. Though you’ll have put in a lot of hard work to make the home welcoming and the rest of it, it’s not going to be perfect. Don’t be offended if there are slight criticisms early on in your rental career -- just take the feedback on board, and make things better.

Read the Room

One thing that can be a little uncomfortable (more for the guests, but still) is meeting to give the keys. Everyone visitor you have will be different. Some will want to talk to you about things in the area, others will have been travelling for a long time and just want to be left on their own. It’s well worth taking the time to perfect your introduction and key handover, as well as how to read a room. Some renters stick around far too long, trying to explain every small detail.

Easy Communication

Whether you stick around with your guests for just a moment or run through everything, you’ll want to make sure that you’re always connected, ready to help as and when it’s needed. You need to treat your rental business for exactly what it is -- a business. While there’ll be travellers who know what to do and can, more or less, be left alone, some will encounter problems that they need you to help with. This can, for sure, get annoying, but it’s what you sign up for when you decide to run a rental operation. WhatsApp, phone calls, and messages through whichever platform you’re using to communicate are all essential.

Stay There Yourself

If you’re using the home solely as a place for guests, then it’s possible that certain issues will be overlooked. Some issues might be so minor that a guest wouldn’t even mention them, but to keep the quality of the property intact and ensure that more problems don’t materialise, it’s important to take care of them as soon as possible. Aside from maintenance issues, you might find that there are niggling issues that could compromise the enjoyment of a guest’s stay. As such, you’ll want to stay at the property yourself every so often -- you’ll discover things that you couldn’t have spotted just by spending an hour there.

Treat Like a Business

Finally, the most important step when it comes to making money from a holiday rental -- treat it like a business! While it’s OK to treat it as a small side project, that approach is going to generate too much money. On the other hand, if you research ways to market your rental, improve your services, manage cash, and where to invest, then you’ll find that increased business -- and thus more money -- comes your way. As with most things in life, it’s about how much effort you put in.

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